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Hospital readmissions not only have the potential for negative physical, emotional, and psychological impacts on individuals in skilled nursing care, but also cost the Medicare program billions of dollars.

Preventing these events whenever possible is beneficial to patients and has been identified as an opportunity to reduce overall health care system costs by improving quality. The issue has become a top priority for the Centers for Medicare & Medicaid Services (CMS) and managed care programs. 


The Protecting Access to Medicare Act of 2014 (PAMA) required CMS to implement the Skilled Nursing Facility (SNF) Value Based Purchasing (VBP) Program, an effort that links financial outcomes to quality performance.

Starting October 1, 2018, all SNF Medicare Part A rates will be cut by 2 percent to fund an incentive payment pool.  At that time, CMS will adjust payments and return some amount to providers based on how well they do in managing hospital readmissions by meeting or exceeding those performance standards.

The program works by:

  • Cutting up to 2 percent in SNF Medicare Part A payments that can be earned back based on a center’s rehospitalization rate in calendar year (CY) 2017 OR its improvement rate between CY 2015 and 2017.
  • Giving back only 60 percent of the assessed Medicare cuts as incentive payments using an all-cause measure to identify rehospitalizations within 30 days of admission to a SNF.

For more information about the program, visit the CMS website. And download AHCA's fact sheet and Frequently Asked Questions.


Data collected for the first year of the program, which will impact payment starting Oct 1st, 2018, has already been collected by CMS, but there are still several reasons providers should continue to focus on the program and their SNF RM rehospitalization rates:

  • Data used to calculate SNF RM rates in CY 2017 have been collected but not finalized. CMS posts Quarterly Confidential Feedback reports via the Quality Improvement Evaluation System (QIES) and the CASPER reporting application. Providers are encouraged to review these reports and alert CMS to any potential errors pertaining to their SNF RM rates by emailing . Correction requests must be submitted before March 31st, 2018.
  • In August of 2018, CMS will be posting Annual Confidential Feedback reports that contain SNF RM rates for CY 2017 and the corresponding performance scores. Providers have 30 days from the posting of their annual report on the QIES reporting application to alert CMS of any issues.
  • While the performance window for the first year of SNF VBP (CY 2017) has passed, the performance window for the second year of SNF VBP (FY 2018) has already begun. Now is the time to improve rehospitalization rates that will impact payment starting on Oct 1, 2019.  Providers should know how they are trending and put plans in place to improve their scores by:
    • Tracking quality metrics to understand their performance.
    • Comparing rates to state and national benchmarks to have a better understanding of performance relative to others.
    • Improving performance through implementation of quality improvement programs (e.g., INTERACT).
    • Reviewing confidential feedback quarterly reports using the CMS QIES System.

AHCA encourages member centers to access the following free resources and tools to get started.